The total market value of USDe, issued by Ethena Labs, has exceeded $3 billion just four months after the launch of the “synthetic dollar.”
The “stablecoin” reached this milestone faster than its competitors, according to The Block. USDe climbed to $2 billion on April 5. Over the past 30 days, the metric has grown by 33%.
Ethena Labs’ “synthetic dollar” has risen to the fourth position by capitalisation in the segment with a 3.3% share, surpassing First Digital USD (FDUSD). In comparison, the leader, Tether’s USDT, holds 57% ($112.2 billion).
The total market value of its main competitor, the CDP-backed stablecoin DAI from MakerDAO, stands at $5.3 billion.
The architecture of USDe is based on a strategy of delta-neutral trading and portfolio management, popular in TradFi.
This strategy is often used in the options market to manage risks associated with changes in the price of the underlying asset. It is a type of Cash–and–Carry trading and is considered safe under favourable conditions.
To issue USDe, users deposit Bitcoin, Ethereum, stETH, or USDT into the protocol.
The collateral assets are used to open equivalent short positions on perpetual contracts. With the rewards received from long holders in the form of funding rates, Ethena Labs can offer an attractive yield of 33.5% per annum in USDe.
According to the issuer, as of May 24, the collateralisation level of USDe stood at 101.74%. In other words, the asset can be redeemed if every user decides to liquidate it.
The underlying collateral assets of USDe, amounting to $2.667 billion, are distributed by the firm among custodians as follows:
- Copper — $1.318 billion;
- Ceffu — $1.338 billion;
- Cobo — $5.52 million.
Ethena Labs reported a reserve fund of $42.3 million.
CryptoQuant advised USDe holders to monitor this parameter. According to calculations, under conditions of negative funding rates, the reserve fund can be maintained if the capitalisation of the “synthetic dollar” does not exceed $3 billion.
Previously, experts analysed the vulnerabilities of the asset during extreme market fluctuations.